Truist Securities analyst Youssef Squali reiterated a Buy rating on Meta Platforms Inc
Squali remains constructive on META based on his expectations for a strong growth recovery in 3Q23, with revenues up 21% Y/Y vs. 11% in 2Q23 and 3% in 1Q23; on the prospects for sustained growth into 4Q23 and on a solid showing of what is to come in terms of AI-powered experiences and hardware at Meta Connect last week.
The analyst raised estimates for Reality Labs' revenue for 4Q23 to $981 million from $582 million and for FY24 to $2.16 billion from $1.56 billion to reflect the contribution of the newly announced Quest 3, which is set to launch on October 17.
Last week, Meta hosted its much-anticipated developer conference, Meta Connect, during which CEO Mark Zuckerberg unveiled several initiatives including Meta AI, an AI-generative assistant similar to ChatGPT and Bard (text-generative chatbots); Emu, an image-generative model; Studio AI, a platform for developers to create new and custom AIs; and Llama 2, the latest version of Llama, its open-source AI-powered large language model (LLM) which underlies most of its AI products and features.
Meta also announced the October 17 release of Quest 3, the new and improved version of its mixed reality headset, and its latest version of RayBan Meta Smart Glasses.
Squali expects Q3 revenue of $33.49 billion vs. consensus $33.41 billion, Q4 revenue of $39.07 billion (prior $38.67 billion) vs. consensus $38.69 billion.
The analyst projects FY23 revenue of $133.20 billion (prior $132.80 billion) vs. consensus of $132.51 billion.
Price Action: META shares traded higher by 1.25% at $303.97 on the last check Monday.
